Pay the right person the right amount

The salary you set must balance the recruit’s expectations with your business’ profit.

  • What is your budget?  What can you honestly afford?  Bearing in mind you’ll need room for pay increases down the track.  Is the person in a role where you’ll be able to measure their contribution to your bottom line?
  • What are their qualifications?  How relevant are these to your business?
  • What is their experience?  How relevant or valuable is this to your business?
  • What is their sticking power?  Do you see them being loyal, showing commitment to your company and becoming a long term asset?
  • What is fair?  Do your research and see what other comparable businesses are paying employees in similar roles.  Also, benchmark their skills and experience against your current staff to see where they fit in the pay scale.
  • Non-monetary perks can go a long way to ensuring job satisfaction.  Will they get a work phone, computer or have access to a company car?  Could they work from home occasionally?  Could their hours be flexible?  Would you offer bonuses or shares for outstanding performance?
  • How badly do you want them?  Try not to make an emotional bid.

Provided you’ve followed a thorough recruitment process, your ongoing investment into their training, productivity and loyalty should pay off.

Be open and honest with them as you decide on the final pay rate – explain your expectations of their performance and that they’ll likely be due for an increase within six to twelve months.

Published Winter 2013.

Serious about your success?